Iran And Its Rivals Dig In On Nuclear Dispute04:27

Iranian President Mahmoud Ahmadinejad regularly defends his country's nuclear program despite international criticism. The president is shown here on a visit to Varamin, south of Tehran, on Wednesday. (AFP/Getty Images)

The year began on a note of cautious optimism on the Iran nuclear front. But talks in Geneva and Istanbul proved inconclusive, and the Arab Spring uprisings soon pushed Iran off center stage. And as 2012 approaches, observers see little reason for optimism regarding a diplomatic solution to the Iran nuclear dispute.

Iranian President Mahmoud Ahmadinejad, under attack from other conservative factions at home, continues to find a safe rhetorical haven in defending Iran's nuclear program — and in attacking the U.N. nuclear watchdog, the International Atomic Energy Agency.

"They've appointed a man as the chief of the IAEA who has no authority. He even violates the agency's rules. The Americans have fabricated a stack of papers, and he keeps speaking about them," Ahmadinejad said on Iranian state TV in November.

The agency under Director General Yukiya Amano has been consumed by the Japanese nuclear disaster this year, but in November it released its sharpest report yet on Iran, listing a series of unexplained activities that the agency said could be relevant to the development of a nuclear weapon. Iran, which insists its program is entirely peaceful, calls the evidence "fabricated." Its supporters said the allegations dated from 2003 and earlier.

But nuclear experts say a careful reading of the report shows that some of the alleged activities continued well after 2003, which for some raises the question: Are they continuing today?

No Momentum For Negotiated Settlement

Former IAEA inspector Olli Heinonen, now at Harvard's Kennedy School of Government, says in light of Iran's accelerating ability to enrich uranium, the potentially weapons-related experiments are worrying. Heinonen says there simply aren't too many other reasons to conduct a test, for example, on a nuclear trigger mechanism.

"It's very unusual that someone does studies like that. Someone is really thinking ... 'What is needed if I decide to make the nuclear weapon?' And we don't know exactly the magnitude of those activities. We see certain things in the IAEA reports, but I have a simple question: Is it all, what is there, or is there more which we don't see?" Heinonen says.

Fearing another round of covert operations, sabotage or worse, Iran says it's moving more of its nuclear work underground. One lawmaker announced this month that work on an additional nuclear plant in Isfahan province had begun, only to have his claim disputed by the country's atomic energy organization.

Analyst Mark Hibbs wrote this month that "it would appear that none of the players — not the United States, not [Europe], not Russia and China, not Iran, and not Israel — really wants a negotiated settlement." It's a point of view that makes sense to a number of experts.

Iran scholar Farideh Farhi at the University of Hawaii says she does not see anything happening until after the U.S. presidential election and possibly until after the Iranian presidential election, sometime in May or June 2013.

"The leadership in Tehran, divided as it may be, seems to have concluded that the Obama administration is unwilling or unable to make a viable deal — which from Iran's perspective means a deal that preserves some kind of right to enrich its own uranium," Farhi says.

One-Track Approach

In Washington, meanwhile, Farhi sees reflexive election-year Iran-bashing nullifying any diplomatic initiatives. Earlier this year, Russia floated the idea of a step-by-step approach in which sanctions would be eased as Iran complies with international demands.

But the harsh November report from the IAEA angered Moscow, leaving that proposal in limbo. Farhi says that, in effect, leaves the international community with a one-track approach.

"I think they have moved completely into the stick part of the stick-and-carrots approach, essentially because they really have not figured out what to do with the question of enrichment anymore," she says.

A report from the Rand Corporation this summer suggested that Washington could keep up the sanctions regime, but also offer incentives to encourage Tehran to answer international questions about its nuclear program. In the current climate, analysts say there's likely to be vocal support for the former, and a resounding silence on the latter.